IBRAHIM MOOSA PERINGADY,MUMBAI vs. ITO 21 (1)(5), MUMBAI

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ITA 1534/MUM/2019Status: DisposedITAT Mumbai12 January 2022AY 2012-133 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Supreme Court decision did not preclude the ITAT from admitting grounds not filed in a revised return. Therefore, the AO was directed to examine the assessee's claim for deduction under Section 54.

What were the facts?

The assessee sold a co-owned residential flat and claimed exemption under Section 54 for the long-term capital gain. The Assessing Officer (AO) made an addition for the capital gain, and the Commissioner (Appeals) confirmed this, relying on a Supreme Court decision regarding claiming deductions not originally filed.

What were the issues?

Whether the assessee can claim a deduction under Section 54 of the Income Tax Act before the AO, even if it was not initially claimed in the return of income.

Which sections of the Income-tax Act were involved?

Section 54

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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

Before: Shri Shamim Yahya

For Appellant: Shri Ashish Pophare
For Respondent: Shri Ashish Pophare
Hearing: 17.11.2021

This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-48 dated 31.01.2019 and pertains to assessment year 2012-13. The issue raised in the appeal is that Ld.CIT(A) erred in disallowing the deduction claimed u/s. 54 of the I.T.Act.

2.

Brief facts of the case are as under:- The assessee had filed return of income for AY 2012-13 on 28.02.2013 declaring total income of Rs 3.97.481/-. The return was processed u/s. 143(1). Since no income under the head Long Term Capital Gain from the sale of property was reported by the assessee in his return, AO issued notice u/s. 148 on 30.03.2015. Assessment u/s. 143(3) r.w.s. 147 was completed by the AO on 28.12.2015 assessing the total income at Rs. 19,85,230/- by making addition of Rs 15.87.746/- on account of Long Term Capital Gain. The assessee is in appeal against this addition. Before the Ld.CIT(A), assessee submitted as under:-

During the year under consideration appellant had sold a residential flat having address at 7, 1st flr, 'B' wing, Kshitij Apartment Co-op. Scty (proposed) for a consideration of Rs. ; 20,00,000/ which was co-owned by your appellant's wife. ...the stamp duty value of the said flat was 42,05,000/- however, the agreement value was Rs. 20,00,000/-... ....... sale consideration of the said flat was utilized to purchase a plot and construction of a residential property at the native place of the appellant, hence the whole long term capital gain is exempted u/s 54 of the t Act. if the long term capital gain is worked out taking both the values agreement as well as stamp duty value.....the AO did not allow the deduction u/s. 54 as your appellant missed out to claim the deduction in the return of income….claim of deduction u/s 54 not claimed by your appellant | should have been allowed by the officer in view of circular no, 14 dated 11.4,1995".

3.

However, Ld.CIT(A) confirmed the order of AO in this regard by placing reliance upon the decision of Hon’ble Supreme Court in the case of Goetze (India) Limited Vs CIT (284 ITR 323).

4.

I have heard the Ld. DR and perused the records. Upon careful consideration, I note that Hon’ble Supreme Court decision in the case of Goetze (India) Limited (supra) had expounded that their decision in that case will not impinge upon the powers of ITAT to admit grounds otherwise than by revised return. Accordingly, I direct the AO to examine the assessees claim under section 54 of the I.T.Act and decide as per law.

5.

In the result, assessee appeal is allowed for statistical purpose.

Pronounced in the open court on 12.01.2022

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